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Good Riddance to Bad Data: Data Governance Gains Momentum

A survey of data governance professionals shows a nascent discipline slowly gaining corporate acceptance, but much work remains to build truly effective programs.

Data governance programs are popping up in large corporations intent on better managing the quality, consistency, usability, and security of their vast pools of data. Yet these programs often face challenges gaining essential executive sponsorship, according to the results of a data governance survey.

The Master Data Governance Benchmarking Survey Report¹, conducted by Deloitte Consulting LLP in August 2013, shows that 40 percent of respondents’ data governance programs are 3 to 5 years old. Another 21 percent are 1 to 2 years old, while 20 percent are more than 5 years old.

Despite the fact that 40 percent of respondents’ data governance programs have been around for 3 to 5 years, only 26 percent characterized their programs as “well-established,” meaning they have business support and an implementation road map for tracking progress. Nearly two-thirds (63 percent) are either still trying to build a formal data governance organization or earn business backing for an informal team—often initiated by IT.

Source: Deloitte Consulting LLP

“Many data governance organizations struggle to obtain executive sponsorship, in part because they have not linked data quality to improved business performance,” says Tom Mongoven, a director with Deloitte Consulting LLP and national leader of its Enterprise Data Management practice.

Only 18 percent of survey respondents currently track specific business value metrics, like the number of reductions in out of stocks driven by having more accurate product and customer data or increases in discounts from strategic suppliers driven by having more accurate vendor data. Meanwhile, more than half of respondents (57 percent) focus their attention on data governance or data quality-related metrics, such as the number of business areas that have accepted and use a data standard, the number of data issues resolved each month, and the percent of records duplicated in multiple systems.

Mongoven says fewer data governance organizations track business value metrics because they need active participation from the business to quantify them. One-fourth of respondents selected capturing business value metrics as one of their data governance organizations’ top challenges. Other leading challenges include attracting appropriate people from the business to participate in the data governance program (cited by 25 percent) and convincing departments to invest their resources in support of a global data stewardship program (cited by 20 percent).

Source: Deloitte Consulting LLP

C.J. Cox, a specialist leader with Deloitte Consulting LLP’s Enterprise Data Management practice, notes that many data governance organizations are caught in a “chicken-and-egg” cycle: They need to track business value metrics to get executives’ attention, but without executive sponsorship, they often lack the funding and resources required to create those metrics. Consequently, Cox observes that it often takes a major business initiative, such as an acquisition or a global ERP consolidation, for executives to rally around data governance.

“Data governance can have a significant positive impact on a business’s top and bottom lines, but it takes time to implement and requires tremendous amounts of influence,” says Mongoven.

As a result, many data governance organizations spend their time educating a range of stakeholders, building consensus across the enterprise for standard data definitions, and encouraging often resistant back-office and front-line employees to adopt new processes for confirming data quality and consistency, according to Cox.

Mongoven adds that educating and building consensus among stakeholders is essential for data governance programs—one that can be made easier with an executive sponsor. For that reason, he suggests data governance programs focus their endeavors on activities that will engage senior leadership, like articulating the dependency of executives’ high-priority initiatives on improved data quality. Mongoven knows of a supply chain executive who became an active data governance sponsor when she learned her global sourcing program was unlikely to meet its cost reduction goals without improving governance of vendor data.

“To establish truly effective data governance, organizations need to make the topic personal to the executive sponsor,” he says. “The passion required to drive agreements and process changes across the business can often be generated when the sponsor views data as a strategic business requirement.”

1. The survey queried 44 data governance professionals from large enterprises that are members of the Americas’ SAP Users’ Group (ASUG). Although the sample size may seem small, Tom Mongoven, a director with Deloitte Consulting LLP, says it represents a valid portion of a niche audience of data governance professionals, and that even though the survey targeted SAP users, the findings are technology-agnostic.

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